The phrase “only in America” was one I heard frequently as a child. It was often said in a light-hearted manner, sometimes with a faux Eastern European accent, but always with a deep reverence for what my parents believed to be it’s central truth: that the United States was a special place. Its unique blend of opportunity, freedom and compassion had allowed our family to go from poor immigrants to prosperous professionals in 2 generations. What a country!
I thought of that phrase this morning in a darker, ironic sense, as I read about a middle-aged couple in Tennessee who were struggling to figure out how to afford health insurance. The husband is retired, and the wife makes a solid salary at a small company. Yet they found that they were trapped by their circumstances: they were too young for Medicare, earning too much for Medicaid, not offered health insurance by the wife’s employer, and not able to afford the market rate for an individual policy on the ACA exchange. After considerable study they decided that they had two options – they could get a divorce, which would allow the husband to qualify on the basis of his lower income for an insurance subsidy, or the wife could take a substantial pay-cut, which would make them eligible for an exchange subsidy. They chose the latter, and actually appear to have come out ahead, since the subsidy was greater than the after-tax difference in her pay before and after.
What is wrong with this picture? Here are a few things that come to mind:
- The health insurance “system” is clearly broken if it creates incentives, no matter unintended, to dissolve marriages and earn less
- There is a huge “complexity tax” that we are all paying to prop up the Rube Goldberg arrangements of the current health insurance marketplace. How much time, effort and anxiety were spent by this couple to figure this out? For those of you fortunate enough to have employer-provided benefits, how much time did it take you to do your benefits enrollment? Did you get it right?
- All this is playing out while Congress cut taxes on the most fortunate in our society
Only in America.
When the Affordable Care Act (ACA) was passed in 2010, the most contentious provisions – which are still the subject of challenges in federal courts – were the establishment of state-wide insurance exchanges, the “individual mandate” that compels eligible citizens to buy insurance, and the expansion of state Medicaid programs. Less well appreciated, but arguably more important, were a wide range of reforms to the Medicare program. Summarized here, they touch on almost all aspects of the program, but I want to concentrate on just one.
The law directed CMS to move Medicare from a strictly fee-for-service (FFS) payment model (“paying for volume”) to one in which the quality of care was factored into the payment received by hospitals and physicians (“paying for value”). As I have written previously I believe this is the right move. There are just too many challenges to improving care and lowering costs that derive from “straight” FFS that is disconnected from any assessment of quality. And while you may not have known that they grew out of the ACA, the payment reforms themselves have gotten a lot of attention. Penalties for readmissions, requirements for physician quality reporting, pilot programs for bundled payments and accountable care organizations are just of few of the Medicare reforms. Even though they currently influence a small percentage of overall Medicare spending, these changes may already be having a big impact on how care is delivered.
Continue reading Not Your Father’s Medicare
Steven Brill made a name for himself with an article in Time magazine back in 2013 entitled “Bitter Pill,” in which he harshly criticized how health care providers (especially hospitals) inflate the costs of their services. The piece created a lot of buzz, and some backlash from hospital groups and others. Now it seems that Mr. Brill has had a bit of a “sick-bed conversion.”
He has a new piece in the January 19th issue of Time called “What I learned from my $190,000 open-heart surgery: the surprising solution for fixing our health care system.” Since Time won’t let you read the article without subscribing or paying, I will save you the trouble. It seems that what he learned is that health care providers – the same ones he vilified in 2013 – were pretty great when they were taking care of his heart in 2015. In fact, he now believes that the way to “fix” healthcare is to “let the foxes run the henhouse” by allowing large integrated health systems become insurance companies and compete on price and “brand” and regulate their profits to assure that they are acting in the public interest. Yeah, well, no kidding.
Continue reading So What Else is New?